CEO says FTC's claims degrade his firm

By: Jeremy Carroll

November 20, 2013

PAINESVILLE, OHIO — Saying the science is on his side and the Federal Trade Commission is "out of the loop," the CEO of ECM BioFilms Inc. pushed back against allegations the company misrepresented the biodegradability of its products.

The 16-year-old company believes it has properly advertised its biodegradable additives, ECM MasterBatch Pellets, President and CEO Robert Sinclair said in an interview at the firm's headquarters in Painesville.

In a 16-page complaint, the FTC alleges the company has made unsubstantiated claims about biodegradability. According to the FTC, the product "will not completely break down and decompose into elements found in nature within a reasonably short period of time after customary disposal."

Before an update to the Green Guides in 2012, ECM BioFilms used marketing materials to say the product would break down in landfills in a time period between nine months and five years. In October 2012, when the Green Guides were updated, the company changed its language, putting an asterisk on its marketing materials when using the word "biodegradable," pointing to the fact that it will take longer than a year for the material to biodegrade in landfills.

"We thought we were the poster boys of following the Green Guides," Sinclair said.

The pellets ECM manufactures in Illinois are used in all sorts of products, including golf tees, bags, highlighters and water bottles.

Normal plastic does not biodegrade because typical bacteria and algae are not able to break down the material.

"Their acids and enzymes can't take these mega molecules and break them down far enough. So they need some help, and that's where our stuff comes in," Sinclair said. "Instead of the bacteria cell moving on, he hangs around for a little bit. And some more bacteria joins in, and all of a sudden they start making a biofilm."

That biofilm will eventually break down the plastic, he said. The materials break down in aerobic and anaerobic settings, Sinclair said, making landfills an acceptable destination for the plastics. During the biodegradation, the material gives off gas that is captured at many landfills for various uses, including making new resins or fuel.

He said the company went through ASTM 5511 testing that proves the product breaks down, but FTC said those tests do not properly replicate landfill conditions.

"The test results they provided to us, we believe, don't substantiate the claims they are making," said Katherine Johnson of the FTC's Bureau of Consumer Protection in a telephone interview.

"The commission does not believe ASTM 5511 simulates conditions found in landfills," Johnson said. "An ASTM 5511 test would not be adequate substantiation that a product would biodegrade in a landfill, at least if they relied on that protocol alone."

Sinclair said the company had asked what tests FTC would recommend, but was not given any options.

"We'll test to whatever," he said.

Johnson said FTC would look at any tests the company would conduct, but does not recommend tests for marketers.

"There are tests out there that could establish that plastic will biodegrade or these kinds of treated plastics will biodegrade in landfills," she said.

Sinclair said the objections were raised over how much moisture was used in the conducted tests.

"The moisture only affects the rate. It's not affecting the extent of biodegradation," he said. "If something is biodegradable, and it's in conditions where other things are biodegrading, it's going to biodegrade fully. It's just a matter of time."

And that "matter of time" might be key to the whole issue. FTC said the product will not break down in a "reasonably short period of time." ECM BioFilms thinks its product falls into that time frame, because under various conditions, it might take grass more than a year to biodegrade.

According to the new Green Guides, a plastic product can be labeled biodegradable if it can fully break down within one year of disposal. That restriction is unreasonable, Sinclair said.

"They talk about a reasonable time being a year or less — it's really insanity," he said. "The FTC, they're out of the loop. Purposely, they've been put out of the loop by interested parties. … They don't get it. What they are doing is, they are basing things on information from the late '80s and early '90s. They haven't changed with the times. This technology is all different now.

"The truth is, the reason we are going to fight this out is, science is on our side," Sinclair said.

Once his company knew the FTC was going to make its complaint, Sinclair said he spoke to each of the company's current customers.

"I told them we were going to fight it, because we believe in what we're doing," Sinclair said. "I think, and time will tell, but I believe every single one of them will stay by us."

About two-thirds of the company's business is in the U.S., CFO Kenneth Sullivan said.

"Before they start buying our product, they test," Sullivan said about ECM BioFilms' customers. "They are not unsophisticated companies."

ECM BioFilms is challenging the commission's finding and a hearing is set for June 18 before an administrative law judge. That ruling could be appealed back to the FTC. That group's ruling could then be appealed to a federal appeals court.

"Of course we have to expense a huge amount of money. And they know that," Sinclair said. "And they've sullied our name. They have all the bargaining chips as far as that goes."